Indian refiner HPCL meets up to 23% of oil need with Russian grades

MOSCOW (MRC) -- Indian refiner Hindustan Petroleum Corp Ltd is meeting up to 23% of its oil needs through discounted Russian grades, as per Hydrocarbonprocessing, citing chairman Pushp Kumar Joshi at the annual shareholder meeting.

Indian refiners, which rarely used to buy Russian oil, have been snapping up discounted barrels after many Western countries shunned purchases from Moscow following its invasion of Ukraine.

HPCL's Russian oil intake is limited by the configuration of its refineries, Joshi said, but the company is maximizing the use of these cheaper so-called opportunity crudes, he added, helping "ringfence" it from risks arising from high oil prices.

State-controlled HPCL operates a 190,000 barrel per day (bpd) Mumbai refinery in Western Maharashtra state and a 300,000 bpd Vizag refinery in southern state of Andhra Pradesh. It is also building a 180,000 bpd refinery and petrochemical complex in the desert state of Rajasthan.

Joshi said HPCL hopes to soon commission secondary units at the Vizag refinery to boost its distillate yields. The company is planning capital expenditure of 750 billion rupees ($9.08 billion) in the next five years including on refinery upgrades and natural gas and renewable projects.

About a quarter of the planned spend would be used for green initiatives to help HPCL meet its 2040 net zero goal. The company plans to transfer all of its green and emerging businesses into a new subsidiary, Joshi said.

As well as selling conventional fuels such as gasoline, gasoil, jet fuel and cooking gas in India, HPCL is also a key supplier of lubricants, which it currently exports to about 20 countries. It is looking to boost output capacity to expand its exports.

Joshi said in-principle approvals had been granted to explore options including carving out the lubricant business to unlock value, subject to approvals from competent authorities.

We remind, Indian state-owned oil refiner Hindustan Petroleum Corporation Ltd (HPCL) said it posted its biggest quarterly profit in nine years, helped by a fall in crude prices and higher refinery margins. Net profit for the fourth quarter ended March 31 jumped about 80% to 32.23 B rupees (USD394.1 MM) from 17.95 B rupees a year earlier, according to a stock exchange filing. Sale of products grew nearly 8.6% to 1.14 T rupees, with domestic sales rising to 10.92 MMt from 10.26 MMt a year earlier.

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MOSCOW (MRC) -- Rising prices of a popular Russian crude sold to China are poised to peak soon as more independent refiners are likely to switch to cheaper oil from Iran which has ramped up exports to fresh 4-1/2 year highs in August, several trade sources said, said Hydrocarbonprocessing.

OPEC+ supply cuts and strong demand from large Chinese refiners for Russian oil have pushed prices for the ESPO Blend grade exported from the Pacific port of Kozmino to the narrowest discounts since the Ukraine war started.

Trade for the light sweet crude for October arrival commenced this week, with the first deal done at a discount of about $1 a barrel to ICE Brent on a deliver-ex-ship basis (DES) to China, according to two trading sources, up from discounts of about $1.80 a barrel for September deliveries. ESPO cargoes were offered at discounts as narrow as 50 cents a barrel prior to the deal.

"We were expecting ESPO prices to continue surging as seen in the past two months," one of the sources said.
"But now we think the price hike could be capped as some refineries may turn to buy Iranian oil."

China's large private refiners have since earlier this year stepped up ESPO purchases, crowding out smaller refiners, known as teapots, and forced them to look at cheaper alternatives like sanctioned Iranian oil. Iran ramped up crude exports in 2023, with May's outflow hitting a 4-1/2 year high of 1.54 million barrels per day, according to ship tracking data from Kpler.

Exports climbed to around 1.6 million bpd in August, or just below 2 million bpd if condensate is included, according an Iranian source familiar with the matter. The abundant supply has widened discounts for Iranian Light crude to about $13 a barrel to ICE Brent in China on a delivered basis from around $10 a barrel last year, even as prices for rival grades, such as Russia's Urals and ESPO crude, have jumped.

"It's very likely that ESPO buyers split under the pressure from a flood of Iranian crude," another source said. "The big private buyers who can afford the higher prices would gobble more ESPO cargoes, while the smaller-scale teapot refiners go to take cheaper Iranian oil."

Moreover, teapots may have found another method to bring in Iranian oil without using their limited import quotas which may lead to higher imports soon, a third source said. Currently, only teapots are taking Iranian oil as big private refiners and state-owned firms still shun the sanctioned crude despite cheap prices.

China's Iranian oil imports in August are at the highest since December 2022, with Vortexa estimating the volume at about 1.2 million bpd. Kpler's estimate is 1.4 million bpd, including cargoes shipped directly from Iran and from the Eastern Outside Port Limit, a zone off the south east coast of Malaysia where many tankers carrying Iranian oil engage in ship-to-ship transfer.

Iran is cranking up crude output to 3.4 million bpd by the end of September, after the country announced earlier this month that its oil exports had surpassed 1.4 million barrels bpd, primarily to China, the Iranian oil minister said this week.

We remind, the global market is anticipated to have a steady CAGR of 4.2% during the period from 2023 to 2033. The overall market size is predicted to expand from USD59.4 B in 2023 to USD89.6 B by 2033. Previously, the ethylene copolymers market was thriving at a CAGR of 3.5% from 2018 to 2022, resulting in a market size of USD57.4 B in 2022.

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MOSCOW (MRC) -- The CEO of Brazil-based Braskem, Roberto Bischoff, said that the company that is Latin America?s biggest petrochemical organization is seeing atypical scenarios in plastic resin markets that include very large flows of plastic resin exports from the world?s top producer countries into the less developed areas because much of the Northern Hemisphere demand remains challenged, said Hydrocarbonprocessing.

“Atypycal scenarios are common in the industry but this scenario specifically includes a few aspects that really aggravate this,” Bischoff said at the end of the second quarter conference call.

“Deep down we are seeing China and its industry having a hard time recovering growth and this has an impact on global product rates. We also see that the U.S. is having some challenge in deteriorating demand and Europe, which in spite of positive signs recently also feels an impact due to inflation and other pressures, (…) even as a result of the war,” he said.

“These influences combined have clearly impacted the petrochemical spreads and they also made it so that products from other regions they are exporting their products to developing countries,” Bischoff said.

Braskem is also North America?s top polypropylene producer and owns a majority stake in Braskem Idesa, an ethylene and polyethylene complex in the state of Veracruz, Mexico.

Spreads seen depressed through 2025. Tax incentives announced in China in early August may help produce some at least "timid" recovery in China resin demand, helping producers everywhere, a Braskem official said.

“(...) Likely in the second semester of next year we will see an improvement but as far as improving spreads and improving the cycle that is likely to be seen in 2025, 2026, 2027, until there is a new cycle of investments in the industry,” Braskem?s CFO Pedro Freitas said.

Slower-than-normal growth in resin demand met this year much-stronger-than-normal supply growth, Freitas said.

“If we look at polyethylene as an example, the market grows by about 3.5% a year. This year it is likely to grow by 2.7% or 2.5%, so that is 1% point in variance compared with the baseline, whereas offers are growing by 6% or 7%. So, in terms of percentages, offers had had a much stronger impact” this year on the market, he said.

Several plants have started up in recent months. Lowered to below investment grade. Challenges faced by Braskem and other companies related to weak plastic resin demand along with a large increase in resin offers following new capacity construction completion in 2023 have led to negative rating action.

Fitch Ratings said on June 30, 2023 that it had downgraded Braskem Idesa from “BB minus” to “B plus“ which is a rating just below investment grade. Fitch explained that the decision was taken after projecting the price for polyethylene, and its impact on Braskem Idesa, for 2023 and 2024.

We remind, Chevron Lummus Global LLC (CLG) announced a recent contract award from Petroleo Brasileiro S.A. (Petrobras) for a new 12,580 BPD hydroisodewaxing (HIDW) unit at the GasLub Hub, a lubricant plant in Itaborai, Rio de Janeiro state, Brazil. Chevron Lummus Global's scope includes the technology license, basic design engineering, and research unit testing services.

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MOSCOW (MRC) -- Republic Services, the second biggest waste disposal company in the U.S. after Waste Management Corp., said that it teamed up with polymer recycler and distributor Ravago to create Blue Polymers, LLC, a company “that will develop a network of facilities designed to produce recycled products” to supply manufacturers that buy resin, said Hydrocarbonprocessing.

The new facilities will utilize recycled polyethylene and polypropylene from Republic Services to create high-quality, recycled resin for consumer packaging and other applications.

The process will convert “high-density polyethylene and polypropylene into fully formulated products for use in both food-grade and non-food-grade sustainable applications,” the statement said.

The four facilities will open over the next four years, beginning in late 2024. Combined, they will produce 300 million pounds per year of recycled plastics, it added.

“Products will include custom-blended and compounded materials for individual customers to help them achieve their sustainability goals and comply with federal, state or local requirements for recycled content,” according to the statement. Ravago will distribute recycled product.

Republic processed during 2022 five million tons of recyclables, including more than 300 million pounds of plastics. U.S. refiners and petrochemical association ask Environmental Protection Agency for strategy “revision” around plastic pollution.

U.S. refiners and petrochemical companies want the country?s top environment regulator to do “a revision” of its strategies to reduce plastic pollution, according to a statement issued on Aug. 4 by the AFPM (Association of Fuel and Petrochemical Manufacturers) and that because they are regarded by the association as too focused on the production side of plastics but not so on recycling initiatives.

“To prevent plastic pollution, we encourage (the Environmental Protection Agency) EPA to embrace policies that enable, not hinder, a circular economy for plastics where we use a range of technologies and strategies to recover post-consumer plastic and transform it back into usable materials,” the AFPM statement said.

According to the AFPM, the Draft National Strategy needs a revision because it “places heavy focus on plastic production, even though it is post-consumer management of plastic that is the real issue.”

The strategy of the EPA also doesn?t consider “any meaningful role for advanced recycling,” the AFPM statement added.

Advanced recycling, as a complement to mechanical recycling, should be used because it has "potential to increase recycling rates, help consumer brands meet ambitious recyclability and recycled content targets, reduce plastic pollution” and can also displace virgin plastic resin demand, it said.

“Petrochemical companies support research and development on recycling technologies, enter joint ventures and partnerships for advanced recycling and post-consumer recycled feedstock projects, support municipal recycling facility improvements on collection and sorting, and collaborate elsewhere along the value chain, including on product design to maximize recyclability,” the AFPM statement said.

AFPM, which describes itself as “the leading trade association representing the manufacturers of base petrochemicals that are the essential building blocks for plastic products,” said that it has already timely submitted its observations and recommendations to the EPA as requested.

The EPA, which has the mission to protect health and the environment in the U.S., had published in its website its Draft National Strategy to Prevent Plastic Pollution earlier this year and had given time to interested parties to submit comments until July 31.

“New and innovative approaches are necessary to reduce and recover plastic materials and improve economic, social, and environmental impacts. With input from organizations, EPA identified three key objectives for the strategy,” the EPA said in its website about the draft.

The EPA?s “objective A” is to reduce pollution during plastic production, while “objectives” B and C, involve improving post-use material management.

Petrochemical companies that produce plastic resin have in recent years faced greater scrutiny from environmental organizations and local authorities, particularly related to ocean and river pollution.

Plastic resin producers are also facing what appears as increased regulation at an international level as countries are trying to work together accords. Back in June 2023, there were international meetings aimed at reducing plastic pollution and there was another international meeting scheduled for later this year that may come with a binding agreement.

The second session of the so-called Intergovernmental Negotiating Committee that works on accords around reducing plastic pollution, including marine, ended its June 3, 2023 meeting in Paris with a mandate for the “INC Chair to prepare a zero draft of the agreement ahead of the next session” in Nairobi in November.

Before the pandemic, several authorities across the Americas had enacted bans on some plastics. Then efforts related to recycling became costlier during the pandemic, analysts said at the time.

We remind, Celanese Corporation, a global chemical and speciality materials company, is pleased to announce that it has entered into a strategic agreement with the polymer distributor, Ravago. Effective on 1 Jan 2023, Ravago is appointed as Celanese's exclusive distributor for its Santoprene and Geolast TPV portfolio in North American countries including the USA, Canada, and Mexico.

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MOSCOW (MRC) -- The global market is anticipated to have a steady CAGR of 4.2% during the period from 2023 to 2033, said Hydrocarbonprocessing.

The overall market size is predicted to expand from USD59.4 B in 2023 to USD89.6 B by 2033. Previously, the ethylene copolymers market was thriving at a CAGR of 3.5% from 2018 to 2022, resulting in a market size of USD57.4 B in 2022.

Demand for ethylene copolymers is gradually increasing, owing to their qualities, such as heat resistance, chemical reactivity, formulation flexibility, and cohesion and adhesion. The packaging and automobile industries are also expected to boost the adoption of ethylene copolymers. Further, the market for ethylene copolymers is projected to be fueled by food packaging.

The industry is expected to increase further as customers become mindful of waste packaging and recycling. Increased research and development initiatives for technological and equipment development, as well as creative product offerings by companies, are all contributing to the demand for ethylene copolymers.

he global market size may be hampered by fluctuating raw material prices and regulatory regulations on various compounds. Nonetheless, there are chances for market players to engage in this market, given the consistent growth of the chemical processing industry and the automotive and packaging industries.

Ethylene-propylene copolymers are amorphous, random, and rubbery polymers made by polymerizing monomers with the Ziegler–Natta catalyst. These are synthetic rubbers that can be used for both special and ordinary purposes.

Ethylene-propylene copolymers are available from many producers in worldwide ethylene-propylene copolymers market for usage in rubber and polyolefin modification. Moreover, in thermoplastic adhesive systems, ethylene-propylene copolymers are employed as basis polymers. Bitumen and TPO roofing membranes are another important application for these copolymers.

Building and construction, automotive, and electrical and electronics are some of the key end-user industries for ethylene-propylene copolymers (E&E). EPDM (ethylene-propylene-diene monomers) are preferred for electrical insulation, gaskets, and lamination.

As per ethylene copolymers market analysis, ethylene-propylene-diene monomers are in high demand. Manufacturers are seeking to offer novel products as a result of environmental concerns in industrialized countries of Europe. As a result, demand for ethylene-propylene copolymers is rising.

The global vehicle industry's increasing need for ethylene-propylene copolymers is regarded as a key factor driving the global market. Ethylene-propylene copolymers are used to make weather stripping and seals for automobiles. Also, these copolymers are added to motor oils as a supplement. Engine mounts, brake parts, and windshield wipers are among the products made with them.

Another significant factor driving demand for ethylene-propylene copolymers is an increase in the need for industrial rubber for use in tire manufacturing. Additionally, the global vehicle rubber-molded components market is expected to be revolutionized in the forthcoming years as a result of research and development operations in the automobile and automobile component sectors.

The ethylene-propylene copolymers market share is expected to benefit from an increase in demand for lightweight automotive components to produce fuel-efficient automobiles during the projected period.

We remind, Shell is considering a sale of its Singapore refining and petrochemical plants as part of a broader strategic review and has hired investment bank Goldman Sachs to explore a potential deal, said several sources close to the matter. The global energy major's new CEO, Wael Sawan, is targeting spending cuts over the next two years to boost profitability while remaining committed to achieving net zero emissions by 2050.

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